Will new eCommerce software and technology lead to the end of retail as we know it?
Merchants have been selling goods since the dawn of time. Although the technology has changed over the years, the changes were gradual and at the end of the day, when people thought of shopping, they thought of going into a physical store, making a purchase and then going back home.
The modern retail landscape has undergone a massive transformation in the past decade, as consumers have made major overhauls in the ways they research and purchase goods both online and off.
The relationship between brands and customers has also changed significantly in the mean time, as many consumers rely more on technology to inform their decisions instead of the merchant trying to sell products to them.
This paradigm shift doesn't seem to be slowing down either. Some retail pundits have gone as far as claiming brick-and-mortar shopping will be extinct within a few years' time as consumers continue to spend more of their budgets online instead of at physical stores. Although that viewpoint is a bit extreme, it does underline the increasingly large role eCommerce software and technology is playing in retail and the willingness of shoppers to embrace these advances.
"There is historical precedent for this kind of upheaval, which recasts the industry's winners and losers," a report from McKinsey asserted. "Within the past century, local corner stores gave way to department stores and supermarkets, then to suburban shopping malls, then to discount chains and big-box retailers. Each of these shifts unfolded faster than the one that preceded it, and each elevated new companies over incumbents."
The utility of mobile devices
According to McKinsey, the trend driving such a radical shift in the retail world is the growing relevance of mobile devices. More than 60 percent of adult mobile subscribers in the United States have upgraded to Web-enabled smartphones (according to research from comScore) and they are taking advantage of these devices to conduct many retail-related tasks, from researching and conducting price comparisons to making purchases.
Although the effect of mobile devices is more pronounced for some retailers – Gilt, for instance, traced smartphone customers back to 30 percent of sales but that may not be as true of brands targeting older demographics – most retailers could benefit at least a little bit by embracing mobile.
"Mobile technology can complement the in-store experience; for example, almost half of the consumers who conduct research on their mobile phones have done so while in stores, and half say they're open to the idea of in-store mobile payments," the McKinsey report added. "Indeed, while just two years ago mobile accounted for only 3 percent of eCommerce sales, that figure will probably rise to 15 percent by the end of 2013."
The McKinsey study pointed to other factors helping to shape the future of the retail industry, such as highly personalized marketing campaigns and better distribution systems that get products to consumers even faster than ever before.
Merchants should note the one thread connecting all of these different drivers together: eCommerce software and technology. By utilizing up-to-date eCommerce software, brands can effectively consolidate all their different retail operations, enabling them to reach customers regardless of which platform their shoppers prefer. They can also use technology to shore up their back-end operations, ranging from supply chain management and distribution to real-time inventory management across platforms.